The Fraud Compensation Fund became operational on 1 September
2005 and replaces the Pensions Compensation Board. It is
operated by the Pension Protection Fund
(PPF).
It was established to provide compensation to occupational pension
schemes that suffer a loss as a result of dishonesty. It
applies to most defined benefit and defined contribution
occupational pension schemes.
Eligibility
Compensation from the FCF may be paid where all of the following
have been met:
- the scheme is an occupational pension arrangement;
- the employer is insolvent or is unlikely to continue as a going
concern;
- there is no likelihood of the scheme being rescued; and
- the value of the scheme's assets has been reduced as a result
of dishonesty.
The FCF should be a last resort. Before approaching the
FCF, an applicant should have made appropriate attempts to seek
recoveries of the loss from other sources. For example, if an
insolvent employer has failed to pay contributions deducted from an
employee's wage into an occupational pension scheme, an application
for recovery may be made to the Department for Business, Enterprise
& Regulatory Reform's Insolvency Service.
Claims
Claims to the FCF can be made by trustees, managers, members,
beneficiaries and scheme administrators. It should be noted
that compensation, if awarded, is likely to be paid direct to
trustees or managers of the scheme only, regardless of who makes
the application.
An application for fraud compensation must be made in
writing:
- within 12 months of the employer's insolvency
event; or
- where there is no insolvency event, 12 months from the date the
trustees or managers ought to have known that the employer was not
able to continue as a going concern.
If an application is made after these deadlines, it can still be
investigated but only where evidence is provided to justify the
delay.
Compensation
If the application is successful, compensation will be paid.
As a general rule, the amount of compensation will be the
difference between:
- the value of the assets as stated in the audited scheme
accounts, or the Pension Protection Fund
valuation, which immediately precede the loss, or if neither of
these exist, the value of the assets on the date immediately
preceding the loss as reported by an accountant - adjusted to take
account of any alterations in their value between the date
immediately preceding the loss and the application date; and
- the value of the assets immediately before the application date
as reported by an accountant.
Contact the FCF
Fraud Compensation Fund
c/o The Pension Protection Fund
Knollys House
17 Addiscombe Road
Croydon
Surrey
CR0 6SR
Telephone: 0845 600 2541
Email: information@ppf.gsi.gov.uk
Website:
www.pensionprotectionfund.org.uk/About-Us/Pages/FraudCompensationFund.aspx
